Oil prices recorded their largest drop in three months after both the United States and Iran signaled openness to negotiations.
Copper prices rebounded from a one-week low, supported by signs of constrained mine supply.
Gold prices rose as falling energy prices eased concerns about inflation and interest rate hikes.
Crude Oil: Oil Prices Post Biggest Drop in Three Months as US and Iran Signal Openness to Talks
Oil prices recorded their largest decline in three months after both the United States and Iran indicated a willingness to negotiate, amid a conflict that has been disrupting Middle East energy supplies.
WTI fell 7.4%, settling near $96.5 per barrel. According to Iran's Islamic Republic News Agency (IRNA), Iran's Supreme Leader has authorized the government to engage in negotiations.
Oil prices had already been declining following reports that U.S. President Trump told Israeli Prime Minister Netanyahu he wants negotiations with Iran to continue.
The oil price decline rippled across the entire energy market, with European benchmark natural gas futures falling nearly 11% at one point and U.S. heating oil posting its largest drop in six months.
Constrained supplies from the Persian Gulf, combined with Ukraine's intensified strikes on Russian refineries, had pushed fuel prices higher in recent months.
"A large risk premium in crude oil and European natural gas is fading," said Darrell Fletcher, commodities managing director at Bannockburn Capital Markets. "Ironically, this is happening right before the midterm elections."
Political pressure on Trump to end the war has intensified, but any relief from Monday's oil price decline came too late to ease the burden that previously high oil prices placed on drivers.
Technical factors also amplified the oil price selloff. Data from Kpler's Bridgeton Research Group showed that trend-following commodity trading advisors cut their Brent long positions from 100% at the open to 91%.
December-delivery WTI fell 7.4%, settling at $96.46 per barrel; January-delivery Brent dropped 7.6%, settling at $104.77 per barrel.
Base Metals
Copper prices rebounded from a one-week low as the sharp oil price decline and an earlier easing of the tech stock selloff helped alleviate concerns about global growth.
Copper has been trading in a narrow range around $14,500 for nearly two months, with the market focused on the sustainability of AI spending, U.S. refined copper tariffs, and rising risks in the Middle East.
Signs of constrained mine supply also provided support for copper prices. Chile's copper output fell to its lowest level in at least 20 years last quarter, and Jefferies said structural supply challenges keep price risks skewed to the upside.
At the close, LME copper rose 1.4% to $14,345 per ton; LME aluminum gained 0.8% to $3,094 per ton; LME nickel advanced 1.9% to $15,556 per ton; LME zinc climbed 1.3% to $3,892.5 per ton; LME tin rose 1.6% to $49,659 per ton; LME lead slipped 0.2% to $1,905.5 per ton.
Precious Metals
Gold prices rose as growing hopes for a diplomatic end to the Iran war drove a sharp decline in oil prices.
Recently, oil prices and gold prices have largely moved in opposite directions, with elevated energy prices raising expectations for tighter monetary policy, which weighs on non-interest-bearing gold.
The earlier easing of the tech stock selloff also supported gold prices, after the unwind of AI-related trades prompted investors to sell gold to cover losses in other assets.
As of 4:41 p.m. Eastern Time, spot gold rose 1.8% to $3,942.91 per ounce; spot silver gained 2.9% to $50.5062 per ounce.
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